...June 30, 2023 The Michaels Cos. Inc.'s soft sales trends continued in the first quarter of fiscal 2023. The company's same-store sales declined by 8.3% during the quarter, led by a pronounced decline in the demand for technology products, which we expect will persist for the rest of the year. We forecast Michaels' revenue will fall by approximately 1% in 2023 as consumer spending remains constrained amid inflationary pressures. The company reduced its inventory by 23% through improved inventory management and lower costs, which we believe better positions it to weather the elevated promotional activity necessary to clear its excess merchandise. We continue to view persistent inflation as a significant risk for highly discretionary categories because consumers will focus on essentials. We expect the demand for Michaels' core arts and crafts product categories will remain soft this year. In addition, we believe consumer spending habits have changed since the post-pandemic reopening, given...
